Private mortgage insurers lock down $3.9 billion in new business in May

Private mortgage insurers, which have been advocating for a place in the future mortgage finance space, wrote $3.92 billion in new mortgage insurance last month, up from nearly $3.7 billion in April.
The Mortgage Insurance Companies of America — which represents member firms Genworth Mortgage Insurance, MGIC, PMI Mortgage Insurance, Radian Guaranty and Republic Mortgage Insurance — released data Thursday, revealing mortgage insurers have $610.8 billion in primary mortgage insurance in force, down from $615.7 billion in April.
During May, the insurers received 23,810 applications, and more than 20,000 borrowers acquired mortgage insurance when buying or refinancing a home.
The industry also reported 44,853 defaults in May, along with 36,159 cures on distressed loans insured by members.
The future of the private mortgage insurance business has been the subject of much speculation this year. In the past, private mortgage insurance helped homeowners with less-than-stellar credit to obtain levels of financing that otherwise might not have been extended.
In March, regulators proposed a rule requiring lenders retain 5% of the credit risk on loans, including mortgages, that are packaged into securities. The exception is the QRM, which among other standards, must include a 20% down payment from the borrower.
MICA continues to advocate for changes to the proposed qualified residential mortgage standard, which members feel leaves out a role for private mortgage insurance when borrowers do not have a 20% down payment.
Standard & Poor's warned earlier in the year that the rule as constructed could cut into the industry's business.
S&P Credit Analyst Ron Joas, said in a report "as the QRM definition is currently written, mortgage insurance is not included as a credit enhancement."
"Absent the GSE exemption, this would significantly limit the loans on which MIs could write mortgage insurance," he said.
Write toKerri Panchuk.

Related Articles

Kerri Ann Panchuk was the Online Editor of HousingWire.com, and regular contributor to HousingWire magazine. Kerri joined HousingWire as a Reporter in early 2011 and since earned a law degree from Southern Methodist University. She previously worked at the Dallas Business Journal.

This month inHousingWire magazine

The appraisal industry is in the midst of huge disruption as automated valuation models and hybrid appraisal products gain favor with regulators and investors. What does the future hold for appraisers and appraisal companies as they adjust to the new realities of automation?

Feature

As Millennials grapple with paying off student loans, their opportunity to buy a home gets pushed further and further into the future. That delay has consequences far beyond individual students — the growing student debt crisis impacts every part of the economy.

Commentary

There has been a conscious and rapid shift to broaden the use of alternative valuation products for origination. Not every decision needs a $500, full-blown 1004 interior appraisal. And in some markets where appraisers are short in number, the turn times can stretch from days to weeks. What these new alternative — some would say disruptive — valuation products do is enable lenders and servicers to better match the product to the risk by harnessing big data and technology.